MERGWÄNT
MARINE
ACT, 1920
Compliments of
TUE AMERICAN EXCHANGE
NATIONAL BANK
New York City
Total Besonrces Over $175,000,000.00
/ : ; The'. iÂmèrîcàîi"--Éxichange
V viÑa'tíórimí Bank
« • •• ••• ••••••
New York City
LEWIS L. CLARKE
President
WALTER H. BEXXETT LOUIS S. TIEMAXX
Vice-President Vice-President
THEODORE H. BAXKS MERCER P. MOSELEY
Vice-President Vice-President
GEORGE 0. HAIGH WILLIAM P. MALBURN
Vice-President Vice-President
THOMAS L. ROBIXSOX
Vice-President
ARTHUR P. LEE
Cashier
A. K. de GUISCARD CHARLES E. MEEK
Asst. Cashier Asst. Cashier
HUGH S. McCLURE FREDERIC M. LANGDON
Asst. Cashier Asst. Cashier
WALTER B. TALLMAN HENRY P. SEIBERT
Asst. Cashier Asst. Cashier
ALEX. G. ARMSTRONG W. G. CLINKUNBROOMER
Asst. Cashier Asst. Cashier
ROY MUROHIE LUKE D. DOYLE
Asst. Cashier Asst. Cashier
ARTHUR D. BRIGHT JOHN P. G. MORAN
Asst. Cashier Asst. Cashier
GEO. W. GIDDINGS
Assistant Trust Officer
Directors
AVERY D. ANDREWS
Royal-Dutch Shell Cos.
THEODORE H. BANKS
Vice-President
WILLIAM M. BARRETT
President, Adams Express Co.
WALTER H. BENNETT
Vice-President
H. C. BLACKISTON
Furness, Withy & Co.. Ltd. and
Prince Line, Ltd.
ORION H. CHENEY
Pres., Pacific Bank of New York
LEWIS L. CLARKE
President
R. FULTON CUTTING
New York
JOHN T
New
WILLIAM P. DIXON
Dixon & Holmes
STEPHEN B. FLEMING
Pres., Intern'1 Agrl. Corp.
GEORGE LEGG
George Legg & Sons
EDGAR J. NATHAN
Cardozo & Nathan
EDWARD C. PLATT
Vice-President, Mackay Cos.
JOSEPH A. SKINNER
Wm. Skinner & Sons
JAMES A. SMITH
Calhoun, Robbina & Co.
ELBRIDGE GERRY SNOW
President, Home Ins. Co.
CLAUS A. SPRECKELS
Pres., Federal Sugar Ref. Co.
TERRY
York
MERCHANT MARINE ACT, 1920.
AN ACT
To provide for the promotion and main¬
tenance of i.ie American merchant marine,
to repeal certain emergency legislation, and
provide for the disposition, regulation, and
use of property acquired thereunder, and for
other purposes.
Be it enacted by the Senate and House of
Representatives of the United States of
America in Congress assembled, That it is
necessary for the national defense and for
the proper growth of its foreign and domes¬
tic commerce that the United States shall
have a merchant marine of the best
equipped and most suitable types of vessels
sufficient to carry the greater portion of its
commerce and serve as a naval or military
auxiliary in time of war or national emer¬
gency, ultimately to be owned and operated
privately by citizens of the United States;
and it is hereby declared to be the policy of
the United States to do whatever may be
necessary to develop and encourage the
maintenance of such a merchant marine,
and, in so far as may not be inconsistent
with the express provisions of this Act, the
United States Shipping Board shall, in the
disposition of vessels and shipping prop¬
erty as hereinafter provided, in the
making of rules and regulations, and in the
administration of the shipping laws keep-
always in view this purpose and object as
the primary end to be attained.
Sec. 2. (a) That the following Acts and
parts of Acts are hereby repealed, subject to
the limitations and exceptions hereinafter,
in this Act, provided :
(1) The emergency shipping fund pro¬
visions of the Act entitled "An Act making
appropriations to supply urgent deficiencies
in appropriations for the Military and Naval
Establishment.? on account of war expenses
1
for the fiscal year ending June 30, 1917, and
for other purposes," approved June 15, 1917,
as amended by the Act entitled "An Act
to amend the emergency shipping fund
provisions of the Urgent Deficiency Appro¬
priation Act, approved June 15, 1917, so as
to empower the President and his desig¬
nated agents to take over certain transporta¬
tion systems for the transportation of
shipyard and plant employees, and for other
purposes," approved April 22, 1918, and as
further amended by the Act entitled "An
Act making appropriation to supply defi¬
ciencies in appropriations for the fiscal year
ending June 30, 1919, and prior fiscal years,
on account of war expenses, and for other
purposes," approved November 4, 1918;
(2) Section 3 of such Act of April 22,
1918;
(3) The paragraphs numbered 2 and 3
under the heading "Emergency shipping
fund" in such Act of November 4, 1918; and
(4) The Act entitled "An Act to confer
on the President power to prescribe charter
rates and freight rates and to requisition
vessels, and for other purposes," approved
July 18, 1918.
(5) Sections 5, 7 and 8, Shipping Act,
1916.
(b) The repeal of such Acts or parts of
Acts is subject to the following limitations;
(1) All contracts or agreements lawfully
entered into before the passage of this Act
under any such Act or part of Act shall be
assumed and carried out by the United
States Shipping Board, hereinafter called
"the board."
(2) All rights, interests, or remedies
accruing or to accrue as a result of any such
contract or agreement or of any action
taken in pursuance of any such Act or parts
of Acts shall be in all respects as valid, and
may be exercised and enforced in like man¬
ner, subject to the provisions of subdivision
(c) of this section, as if this Act had not
been passed.
(3) The repeal shall not have the effect
of extinguishing any penalty incurred under
such Acts or parts of Acts, but such Acts or
2
parts of Acts shall remain in force for the
purpose of sustaining a prosecution for
enforcement of the penalty therein provided
for the violation thereof.
(4) The board shall have full power and
authority to complete or conclude any con¬
struction work begun in accordance with
the provisions of such Acts or parts of Acts
if, in the opinion of the board, the comple¬
tion or conclusion thereof is for the best
interests of the United States.
(c) As soon as practicable after the pass¬
age of this Act the board shall adjust, settle,
and liquidate all matters arising out of or
incident to the exercise by or through the
President of any of the powers or duties
conferred or imposed upon the President
by any such Act or parts of Acts ; and for
this purpose the board, instead of the Presi-
aent, shall have and exercise anv of such
powers and duties relating to the determina¬
tion and payment of just compensation :
Provided, That any person dissatisfied
with any decision of the board shall have the
same right to sue the United States as he
would have had if the decision had been
made by the President of the United States
under the Acts hereby repealed.
Sec. 3. (a) That section 3 of the "Shipping
Act, 1916," is amended to read as follows:
"Sec. 3. That a board is hereby created
to be known as the United States Shipping
Board and hereinafter referred to as the
board. The board shall be composed of
seven commissioners, to be appointed by
the President, by and with the advice and
consent of the Senate ; and the President
shall designate the member to act as chair¬
man of the board, and the board may elect
one of its members as vice chairman. Such
commissioners shall be appointed as soon
as practicable after the enactment of this
Act and shall continue in office two for a
term of one year, and the remaining five for
terms of two, three, four, five, and six years,
respectively, from the date of their appoint¬
ment, the term of each to be designated by
the President, but their successors shall be
appointed for terms of six years, except
3
that any person chosen to fill a vacancy
shall be appointed only for the unexpired
term of the commissioner whom he suc¬
ceeds. The commissioners shall be ap¬
pointed with due regard to their fitness for
the efficient discharge of the duties imposed
on them by this Act, and two shall be
appointed from the States touching the
Pacific Ocean, two from the States touch¬
ing the Atlantic Ocean, one from the States
touching the Gulf of Mexico, one from the
States touching the Great Lakes, and one
from the interior, but not more than one
shall be appointed from the same State. Not
more than four of the commissioners shall
be appointed from the same political party.
A vacancy in the board shall be filled in the
same manner as the original appointments.
No commissioner shall take any part in the
consideration or decision of any claim or
particular controversy in which he has a
pecuniary interest. Each commissioner
shall devote his time to the duties of his
office, and shall not be in the employ of or
hold any official relation to any common
carrier or other person subject to this Act,
nor while holding such office acquire any
stock or bonds thereof or become pecuniarily
interested in any such carrier. The duties
of the board may be so divided that under
its supervision the directorship of various
activities may be assigned to one or more
commissioners. Any commissioner may be
removed by the President for inefficiency,
neglect of duty, or malfeasance in office. A
vacancy in the board shall not impair the
right of the remaining members of the board
to exercise all its powers. The board shall
have an official seal, which shall be judicially
noticed. The board may adopt rules and reg¬
ulations in regard to its procedure and the
conduct of its business. The board may em¬
ploy within the limits of appropriations
made therefor by Congress such attorneys
as it finds necessary for proper legal service
to the board in the conduct of its work, or
for proper representation of the public in¬
terest in investigations made by it or pro¬
ceedings pending before it whether at the
4
board's own instance or upon complaint, or
to appear for or represent the board in any
case in court or other tribunal.
"The board shall have such other rights
and perform such other duties not incon¬
sistent with the Merchant Marine Act, 1920,
as are conferred by existing law upon the
board in existence at the time this section
as amended takes effect.
"The commissioners in office at the time
this section as amended takes effect shall
hold office until all the commissioners pro¬
vided for in this section as amended are
appointed and qualify."
(b) The first sentence of section 4 of the
"Shipping Act, 1916," is amended to read
as follows :
"Sec. 4 That each member of the board
shall receive a salary of $12,000 per annum."
Sec. 4. That all vessels and other property
or interests of whatsoever kind, including
vessels or property in course of construction
or contracted for, acquired by the President
through any agencies whatsoever in pursu¬
ance of authority conferred by the Acts or
parts of Acts repealed by section 2 of this
Act, or in pursuance of the joint resolution
entitled "Joint resolution authorizing the
President to take over for the United States
the possession and title of any vessel within
its jurisdiction, which at the time of coming
therein was owned in whole or in part by
any corporation, citizen, or subject of any
nation with which the United States may
be at war, or was under register of any
such nation, and for other purposes," ap¬
proved May 12, 1917, with the exception
of vessels and property the use of which is
in the opinion of the President required by
any other branch of the Government service
of the United States, are hereby transferred
to the board: Provided, That all vessels in
the military and naval service of the United
States, including the vessels assigned to
river and harbor work, inland waterways,
or vessels for such needs in the course of
construction or under contract by the War
Department, shall be exempt from the pro¬
visions of this Act.
5
Sec. 5. That in order to accomplish the
declared purposes of this Act, and to carry
out the policy declared in section 1 hereof,
the board is authorized and directed to sell,
as soon as practicable, consistent with good
business methods and the objects and pur¬
poses to be attained by this Act, at public
or private competitive sale after appraise¬
ment and due advertisemenrt, to per.sons
who are citizens of the United States, ex¬
cept as provided in section 6 of this Act,
all of the vessels referred to in section 4
of this Act or otherwise acquired by the
board. Such sale shall be made at such
prices and on such terms and conditions
as the board may prescribe, but the com¬
pletion of the payment o^ the purchase
price and interest shall not be deferred
more than fifteen years after the making
of the contract of sale. The board in fixing
or accepting the sale price of such vessels
shall take into consideration the prevailing
domestic and foreign market price of, the
available supply of, and the demand for ves¬
sels, existing freight rates and prospects of
their maintenance, the cost of constructing
vessels of similar types under prevailing
conditions, as well as the cost of the con¬
struction or purchase price of the vessels
to be sold, and any other facts or conditions
that would influence a prudent, solvent
business man in the sale of similar vessels
or property which he is not forced to sell.
All sales made under the authority of this
Act shall be subject to the limitations and
restrictions of section 9 of the "Shipping
Act, 1916," as amended.
Sec. 6. That the board is authorized and
empowered to sell to aliens, at such prices
and on such terms and conditions as it may
determine, not inconsistent with the pro¬
visions of section 5 (except that completion
of the payment of the purchase price and
interest shall not be deferred more than ten
years after the making of the contract of
sale), such vessels as it shall, after careful
investigation, deem unnecessary to the pro¬
motion and maintenance of an efficient
American merchant marine; but no such
6
sale shall be made unless the board, after
diligent effort, has been unable to sell, in
accordance with the terms and conditions
of section 5, such vessels to persons citizens
of the United States, and has, upon an
affirmative vote of not less than five of its
members, spread upon the minutes of the
board, determined to make such sale ; and
it shall make as a part of its records a full
statement of its reasons for making such
sale. Deferred payments of purchase price
of vessels under this section shall bear inter¬
est at the rate of not less than 5^ per cent
per annum, payable semi-annually.
Sec. 7. That the board is authorized and
directed to investigate and determine as
promptly as possible after the enactment of
this Act and from time to time thereafter
what steamship lines should be established
and put in operation from ports in the
United States, or any Territory, District,
or possession thereof to such world and
domestic markets as in its judgment are
desirable for the promotion, development,
expansion, and maintenance of the foreign
and coastwise trade of the United States,
and an adequate postal service, and to de¬
termine the type, size, speed, and other
requirements of the vessels to be employed
upon such lines and the frequency and regu¬
larity of their sailings, with a view to fur¬
nishing adequate, regular, certain, and
permanent service. The board is authorized
to sell, and if a satisfactory sale can not be
made, to charter such of the vessels referred
to in section 4 of this Act or otherwise
acquired by the board as will meet these re¬
quirements to responsible p'^rsons who are
citizens of the United States who agree
to establish and maintain such lines upon
such terms of payment and other conditions
as the board may deem just and necessary
to secure and maintain the service desired ;
and if any such steamship line is deemed
desirable and necessary, and if no such citi¬
zen can be secured to supply such service
by the purchase or charter of vessels on
terms satisfactory to the board, the board
shall operate vessels on such line until the
7
business is developed so that such vessels
may be sold on satisfactory terms and the
service maintained, or unless it shall appear
within a reasonable time that such line can
not be made self-sustaining. The ^ Postmas¬
ter General is authorized, notwithstanding
the Act entitled "An Act to provide for ocean
mail service between the United States and
foreign ports, and to promote commerce,"
approved March 3, 1891, to contract for the
carrying of the mails over such lines at such
price as may be agreed upon by the board
and the Postmaster General : Provided,
That preference in the sale or assignment
of vessels for operation on such steamship
lines shall be given to persons who are citi¬
zens of the United States who have the
support, financial and otherwise, of the
domestic communities primarily interested
in such lines if the board is satisfied of the
ability of such persons to maitain the serv¬
ice desired and proposed to be maintained,
or to persons who are citizens of the United
States who may then be maintaining a serv¬
ice from the port of the United States to or
in the general direction of the world market
port to which the board has determined that
such service shall be established: Provided
further. That where steamship lines and
regular service have been established and
are being maintained by ships of the board
at the time of the enactment of this Act,
such lines and service shall be maintained
by the board until, in the opinion of the
board, the maintenance thereof is unbusi¬
nesslike and against the public interest :
And provided further. That whenever the
board shall determine, as provided in this
Act, that trade conditions warrant the es¬
tablishment of a service or additional
service under Government administration,
where a service is already being given by
persons, citizens of the United States, the
rates and charges for such Government
service shall not be less than the cost
thereof, including a proper interest and
depreciation charge on the value of Govern¬
ment vessels and equipment employed
therein.
8
Sec. 8. That it shall be the duty of the
board, in co-operation with the Secretary
of War, with the object of promoting, en¬
couraging, and developing ports and trans¬
portation facilities in connection with water
commerce over which it has jurisdiction,
to investigate territorial regions and zones
tributary to such ports, taking into consid¬
eration the economies of transportation by
rail, water and highway and the natural
direction of the flow of commerce; to inves¬
tigate the causes of the congestion of com¬
merce at ports and the remedies applicable
thereto; to investigate the subject of water
terminals, including the necessary docks,
warehouses, apparatus, equipment, and
appliances in connection therewith, with a
view to devising and suggesting the types
most appropriate for different locations and
for the most expeditious and economical
transfer or interchange of passengers or
property between carriers by water and
carriers by rail ; to advise with communities
regarding the appropriate location and plan
of construction of wharves, piers, and water
terminals; to investigate the practicability
and advantages of harbor, river, and port
improvements in connection with foreign
and coastwise trade; and to investigate any
other matter that may tend to promote and
encourage the use by vessels of ports ade¬
quate to care for the freight which would
naturally pass through such ports : Pro¬
vided, That if after such investigation the
board shall be of the opinion that rates,
charges, rules, or regulations of common
carriers by rail subject to the jurisdiction
of the Interstate Commerce Commission
are detrimental to the declared object of
this section, or that new rates, charges,
rules, or regulations, new or additional port
terminal facilities, or affirmative action on
the part of such common carriers by rail is
necessary to promote the objects of this
section the board may submit its findings
to the Interstate Commerce Commission for
such action as such commission may con¬
sider proper under existing law.
Sec. 9. That if the terms and conditions
9
of any sale of a vessel made under the pro¬
visions of this Act include deferred pay¬
ments of the purchase price, the board shall
require, as part of such terms and condi¬
tions, that the purchaser of the vessel shall
keep the same insured (a) against loss or
damage by fire, and against marine risks
and disasters, and war and other risks if
the board so specifies, with such insurance
companies, associations, or underwriters,
and under such forms of policies, and to
such an amount, as the board may pre¬
scribe or approve ; and (b) by protection
and indemnity insurance with such insur¬
ance companies, associations, or under¬
writers and under such forms of policies,
and to such an amount as the board may
prescribe or approve. The insurance re¬
quired to be carried under this section shall
be made payable to the board and/or to the
parties as interest may appear. The board
is authorized to enter into any agreement
that it deems wise in respect to the pay¬
ment and/or the guarantee of premiums of
insurance.
Sec. 10. That the board may create out
of net revenue from operations and sales,
and maintain and administer, a separate in¬
surance fund, which it may use to insure
in whole or in part, against all hazards com¬
monly covered by insurance policies in such
cases, any interest of the United States (1)
in any vessel, either constructed or in pro¬
cess of construction, and (2) in any plants
or materials heretofore or hereafter acquir¬
ed by the board or hereby transferred to the
board.
Sec. 11. That during a period of five
years from the enactment of this Act the
board may annually set aside out of the
revenues from sales and operations a sum
not exceeding $25,000,000, to be known as
its construction loan fund, to be used in
aid of the construction of vessels of the
best and most efficient type for the estab¬
lishment and maintenance of service on
steamship lines deemed desirable and nec¬
essary by the board, and such vessels shall
be equipped with the most modern, the
10
most efficient, and the most economical
machinery and commercial appliances. The
board shall use such fund to the extent re¬
quired upon such terms as the board may
prescribe to aid persons, citizens of the
United States, in the construction by them
in private shipyards in the United States
of the foregoing class of vessels. No aid
shall be for a greater sum than two-thirds
of the cost of the vessel or vessels to be
constructed, and the board shall require
such security, including a first lien upon
the entire interest in the vessel or vessels
so constructed as it shall deem necessary
to insure the repayment of such sum with
interest thereon and the maintenance of the
service for which such vessel or vessels
are built.
Sec. 12. That all vessels may be recondi¬
tioned and kept in suitable repair and until
sold shall be managed and operated by the
board or chartered or leased by it on such
terms and conditions as the board shall deem
wise for the promotion and maintenance of
an efficient merchant marine, pursuant to
the policy and purposes declared in sections
1 and 5 of this Act; and the United States
Shipping Board Emergency Fleet Corpora¬
tion shall continue in existence and have au¬
thority to operate vessels, unless otherwise
directed by law, until all vessels are sold in
accordance with the provisions of this Act,
the provision in section 11 of the "Shipping
Act, 1916," to the contrary notwithstanding.
Sec. 13. That the board is further author¬
ized to sell all property other than vessels
transferred to it under section 4 upon such
terms and conditions as the board may de¬
termine and prescribe.
Sec. 14. 1 hat the net proceeds derived by
the board prior to July 1, 1921, from any
activities authorized by this Act, or by
the ^Shipping Act, 1916," or by the Acts
specified m section 2 of this Act, except such
an amount as the board shall deem neces¬
sary to withhold as operating capital, for the
purposes of section 12 hereof, and for the in¬
surance fund authorized in section 10 hereof,
and for the construction loan fund au-
11
thorized in section 11 hereof, shall be cover¬
ed into the Treasury of the United States to
the credit of the board and may be expended
by it within the limits of the amounts here¬
tofore or hereafter authorized, for the con¬
struction, requisitioning, or purchasing of
vessels. After July 1, 1921, such net pro¬
ceeds, less such an amount as may be au¬
thorized annually by Congress to be with¬
held as operating capital, and less such sums
as may be needed for such insurance and
construction loan funds, shall be covered
into the Treasury of the United States as
miscellaneous receipts. The board shall, as
rapidly as it deems advisable, withdraw in¬
vestment of Government funds made during
the emergency under the authority conferred
by the Acts or parts of Acts repealed by sec¬
tion 2 of this Act and cover the net proceeds
thereof into the Treasury of the United
States as miscellaneous receipts.
Sec. 15. That the board shall not require
payment from the War Department for the
charter hire of vessels owned by the United
States Government furnished by the board
from July 1, 1918, to June 30, 1919, inclu¬
sive, for the use of such department.
Sec. 16. That all authorization to pur¬
chase, build, requisition, lease, exchange, or
otherwise acquire houses, buildings, or land
under the Act entitled "An Act to authorize
and empower the United States Shipping
Board Emergency Fleet Corporation to pur¬
chase, lease, requisition, or otherwise ac¬
quire, and to sell or otherwise dispose of im¬
proved or unimproved lands, houses, build¬
ings, and for other purposes," approved
March 1, 1918, is hereby terminated: Pro¬
vided, however. That expenditures may be
made under said Act for the repair of houses
and buildings already constructed, and the
completion of such houses or buildings as
have heretofore been contracted for or are
under construction, if considered advisable,
and the hoard is authorized and directed to
dispose Ol all such properties or the interest
of the L'nited States in all such pro[ierties at
as earl\' a date as practicable, consistent with
12
good business and the best interests of
the United States.
Sec. 17. That the board is authorized and
directed to take over on January 1, 1921, the
possession and control of and to maintain
and develop, all docks, piers, warehouses,
wharves and terminal equipment and facil¬
ities, including all leasehold easements,
rights of way, riparian rights and other
rights, estates and interests therein or appur¬
tenant thereto, acquired by the President by
or under the Act entitled "An Act making
appropriations to supply urgent deficiencies
in appropriations for the fiscal year ending
June 30, 1918, and prior fiscal years, on ac¬
count of war expenses, and for other pur¬
poses," approved March 28, 1918. The pos¬
session and control of such other docks,
piers, warehouses, wharves and terminal
equipment and facilities or part thereof, in¬
cluding all leasehold easements, rights of
way, riparian rights and other rights, estates
or interests therein or appurtenant thereto
which were acquired by the War Department
or the Navy Department for military or
naval purposes during the war emergency
may be transferred by the President to the
board whenever the President deems such
tiansfer to be for the best interests of the
United States.
The President may at any time he deems
it necessary, by order setting out the need
therefore and fixing the period of such need
permit or transfer the possession and control
of any part of the property taken over by or
transferred to the board under this section
to the War Department or the Navy Depart¬
ment for their needs, and when in the opin¬
ion of the President such need therefor
ceases the possession and control of such
property shall revert to the board. None of
such property shall be sold except as may be
hereafter provided by law.
Sec. 18. That section 9 of the "Shipping
Act, 1916," is amended to read as follows:
"Sec. 9. That any vessel purchased, char¬
tered, or leased from the board, by persons
who are citizens of the United States, may
be registered or enrolled and licensed, or
13
both registered and enrolled and licensed,
as a vessel of the United States and entitled
to the benefits and privileges appertaining
thereto : Pro\-ided, That foreign-built vessels
admitted to American Registry or enroll¬
ment and license under this Act, and vessels
owned by any corporation in which the
United States is a stockholder, and vessels
sold, leased, or chartered by the board to any
person a citizen of the United States, as pro¬
vided in this Act, may engage in the coast¬
wise trade of the United States while owned,
leased, or chartered by such a person.
"Every vessel purchased, chartered, or
leased from the board shall, unless otherwise
authorized by the board, be operated only
under such registry or enrollment and
license. Such vessels while employed solely
as merchant vessels shall be subject to all
laws, regulations, and liabilities governing
merchant vessels, whether the United States
be interested therein as owner, in whole or
in part, or hold any mortgage, lien, or other
interest therein.
"It shall be unlawful to sell, transfer or
mortgage, or, except under regulations pre¬
scribed by the board, to charter, any vessel
purchased from the board or documented
under the laws of the United States to any
person not a citizen of the United States,
or to put the same under a foreign registry
or flag, without first obtaining the board's
approval.
"Any vessel chartered, sold, transferred
or mortgaged to a person not a citizen of
the United States or placed under a foreign
registry or flag, or operated, in violation of
any provision of this section shall be for¬
feited to the United States, and whoever
violates any provision of this secton shall be
guilty of a misdemeanor and subject to a
fine of not more than $5,000, or to imprison¬
ment for not more than five years, or both."
Sec. 19. (1) The board is authorized and
directed in aid of the accomplishment of the
purposes of this Act (a) to make all neces¬
sary rules and regulations to carry out the
provisions of this Act : (b) to make rules and
regulations affecting shijjping in the foreign
14
trade not in conflict with law in order to ad¬
just or meet general or special conditions
unfavorable to shipping in the foreign trade,
whether in any particular trade or upon any
particular route or in commerce generally
and which arise out of or result from foreign
laws, rules or regulations or from competi¬
tive methods or practices employed by own¬
ers, operators, agents, or masters of vessels
of a foreign country ; and (c) to request the
head of any department, hoard, bureau, or
agency of the Government to suspend, modi¬
fy, or annul rules or regulations which have
been established by such department, board,
bureau, or agency, or to make new rules or
regulations afifecting shipping in the foreign
trade other than such rules or regulations
relating to the Public Health Service, the
Consular Service, and the Steamboat-In¬
spection Service.
(2) No rule or regulation shall hereafter
be established by any department, board, bu¬
reau, or agency of the Government which
affect shipping in the foreign trade, except
rules or regulations affecting the Public
Health Service, the Consular Service, and
the Steamboat-Inspection Service, until
such rule or regulation has been submit¬
ted to the board for its approval and final
action has been taken thereon by the board
or the President.
(3) Whenever the head of any depart¬
ment, board, bureau, or agency of the Gov¬
ernment refuses to suspend, modify, or annul
any rule or regulation, or make a new rule
or regulation upon request of the board, as
provided in subdivision (c) of paragraph (1)
of this section, or objects to the decision of
the board in respect to the approval of any
rule or regulation, as provided in paragraph
(2) of this section, either the board or the
head of the department, board, bureau, or
agency which has established or is attempt¬
ing to establish the rule or regulation in
question, may submit the facts to the Presi¬
dent, who is hereby authorized to establish
or suspend, modify, or annul such rule or
regulation.
(4) No rule or regulation shall he estab-
15
lisliecl wliich ill any manner gives vessels
owned by the United States any preference
or favor over those vessels documented
under the laws of the United States and
owned by persons who are citizens of the
United States.
Sec. 20. (1) That section 14 of the "Ship¬
ping Act, 1916," as amended, is amended to
read as follows:
"Section 14. That no common carrier by
water shall, directly or indirectly, in respect
to the transportation by water of passengers
or property between a port of a State, Terri¬
tory, District, or possession of the United
States and any other such port or a port of
a foreign country—
"First. Pay, or allow, or enter into any
combination, agreement, or understanding,
express or implied, to pay or allow, a de¬
ferred rebate to any shipper. The term
'deferred rebate' in this Act means a return
of any portion of the freight money by a
carrier to any shipper as a consideration
for the giving of all or any portion of his
sliipments to the same or any other carrier,
or for any other purpose, the payment of
which is deferred beyond the completion of
the service for which it is paid, and is made
only if, during both the period for which
computed and the period of deferment, the
shipper has complied with the terms of the
rebate agreement or arrangement.
"Second. Use a fighting ship either sep¬
arately or in conjunction with any other
carrier, through agreement or otherwise.
The term 'fighting ship' in this Act means
a vessel used in a particular trade by a car¬
rier or group of carriers for the purpose
of excluding, preventing, or reducing com¬
petition by driving another carrier out of
said trade.
"Third. Retaliate against any shipper
by refusing, or threatening to refuse, space
accomodations when such are available, or
resort to other discriminating or unfair
methods, because such shipper has patron¬
ized any other carrier or has filed a com¬
plaint charging unfair treatment, or for any
other reason.
16
"Fourth. Make any unfair or unjustly
discriminatory contract with any shipper
based on the volume of freight offered, or
unfairly treat or unjustly discriminate
against any shipper in the matter of fa)
cargo-space accommodations or other facili¬
ties, due regard being had for the proper
loading of the vessel and the available ton¬
nage ; (b) the loading and landing of freight
in proper condition ; or (c) the adjustment
and settlement of claims.
"Any carrier who violates any provision
of this section shall be guilty of a misde¬
meanor punishable by a fine of not more
than $25,000 for each offence.
(2) The "Shipping Act, 1916," as amend¬
ed, is amended by inserting after section
14 a new section to read as follows :
"Section 14a. The board upon its own
initiative may, or upon complaint shall,
after due notice to all parties in interest
and hearing, determine whether any per¬
son, not a citizen of the United States and
engaged in transportation by water of pas¬
sengers or property—
"(1) Has violated any provision of sec¬
tion 14, or
"(2) Is a party to any combination,
agreement, or understanding, express or
implied, that involves in respect to trans¬
portation of passengers or property between
foreign ports, deferred rebates or any other
unfair practice designated in section 14, and
that excludes from admission upon equal
terms with all other parties thereto, a com¬
mon carrier by water, which is a citizen
of the United States and which has ap¬
plied for such admission.
"If the board determines that any such
person has violated any such provision or
is a party to any such combination, agree¬
ment, or understanding, the board shall
thereupon certify such fact to the Secretary
of Commerce. The Secretary shall there¬
after refuse such person the right of entry
for any ship owned or operated by him or
by any carrier directly or indirectly con¬
trolled by him, into any port of the United
States, or any Territory, District, or pos-
17
session thereof, until the board certifies that
the violation has ceased or such combina¬
tion, agreement, or understanding has been
terminated."
Sec. 21. That from and after February
1, 1922, the coastwise laws of the United
States shall extend to the island Territories
and possessions of the United States not
now covered thereby, and the board is di¬
rected prior to the expiration of such year
to have established adequate steamship
service at reasonable rates to accomodate
the commerce and the passenger travel of
said islands and to maintain and operate
such service until it can be taken over and
operated and maintained upon satisfactory
terms by private capital and enterprise:
Provided, That if adequate shipping ser¬
vice is not established by February 1, 1922,
the President shall extend the period here¬
in allowed for the establishment of ;uich
service in the case of any island Territory
or possession for such time as may be neces¬
sary for the establishment of adequate ship¬
ping facilities therefor: Provided further,
That until Congress shall have authorized
the registry as vessels of the United States
of vessels owned in the Philippine Islands,
the Government of the Philippine Islands
is hereby authorized to adopt, from time
to time, and enforce regulations governing
the transportation of merchandise and pas¬
sengers between ports or places in the
Philippine Archipelago; and provided fur¬
ther, That the foregoing provisions of this
section shall not take effect with reference
to the Philippine Islands until the Presi¬
dent of the United States after a full inves¬
tigation of the local needs and conditions
shall, by proclamation, declare that an ade¬
quate shipping service has been established
as herein provided and fix a date for the
going into effect of the same.
Sec. 22. That the Act entitled "An Aet
giving the United States Shipping Board
power to suspend present provisions of law
and permit vessels of foreign registry and
foreign-built vessels admitted to American
registry under the Act of August 18, 1914,
18
to engage in the coastwise trade during the
present war and for a period of one hundred
and twenty days thereafter, except the
coastwise trade with Alaska," approved Oc¬
tober 6, 1917, is hereby repealed: Provided,
That all foreign-built vessels admitted to
American registry, owned on February 1,
1920, by persons citizens of the United
States, and all foreign-built vessels owned
by the United States at the time of the en¬
actment of this Act, when sold and owned
by persons, citizens of the United States,
may engage in the coastwise trade so long
as they continue in such ownership subject
to the rules and regulations of such trade :
Provided, That the board is authorized to
issue permits for the carrying of passengers
in foreign ships if it deems it necessary so
to do, operating between the Territory of
Hawaii and the Pacific coast up to Febru¬
ary 1, 1922.
Sec. 23. That the owner of a vessel docu¬
mented under the laws of the United Stares
and operated in foreign trade shall, for
each of the ten taxable years while so op¬
erated, beginning with the first taxable year
ending after the enactment of this Act, be
allowed as a deduction for the purpose of
ascertaining his net income subject to the
war-profits and excess-profits taxes im¬
posed by Title III of the Revenue Act of
1918 an amount equivalent to the net earn¬
ings of such vessel during such taxable
year, determined in accordance with rules
and regulations to be made by the board:
Provided, That such owner shall not be
entitled to such deduction unless during
such taxable year he invested, or set aside
under rules and regulations to be made by
the board in a trust fund for investment,
in the building in shipyards in the United
States of new vessels of a type and kind
approved by the board, an amount, to be
determined by the Secretary of the Trea¬
sury and certified by him to the board,
equivalent to the war-profits and excess-
profits taxes that would have been pay¬
able by such owner on account of the net
earnings of such vessels but for the de-
19
duction allowed under the provisions of this
section : Provided further, That at least
two-thirds of the cost ol any vessel con
structed under this paragraph shall be paid
for out of the ordinary funds or capital of
the person having such vessel constructed.
That during the period of ten years from
the enactment of this Act any person a
citizen of the United States who may sell
a vessel documented under the laws of the
United States and built prior to January 1,
1914, shall be exempt from all income taxes
that would be payable upon any of the pro¬
ceeds of such sale under Title I, Title II, and
Title III of the Revenue Act of 1918 if
the entire proceeds thereof shall be invested
in the building of new ships in American
shipyards, such ships to be documented un¬
der the laws of the United States and to
be of a type approved by the board.
Sec. 24. That all mails of the United
States shipped or carried on vessels shall,
if practicable, be shipped or carried on
American-built vessels documented under
the laws of the United States. No contract
hereafter made with the Postmaster General
for carrying mails on vessels so built and
documented shall be assigned or sublet, and
no mails covered by such contract shall be
carried on any vessel not so built and docu¬
mented. No money shall be paid out of the
Treasury of the United States on or in
relation to any such contract for carrying
mails on vessels so built and documented
when such contract has been assigned or
sublet or when mails covered by such con¬
tract are in violation of the terms thereof
carried on any vessel not so built and docu¬
mented. The board and the Po.stmaster
General, in aid of the development of a
merchant marine adequate to provide for
the maintenance and expansion of the for¬
eign or coastwise trade of the United States
and of a satisfactory postal service in con¬
nection therewith, shall from time to time
determine the just and reasonable rate of
compensation to be paid for such service,
and the Postmaster General is hereby au¬
thorized to enter into contracts within the
20
limits of appropriations made therefor by
Congress to pay for the carrying of such
mails in such vessels at such rate. Nothing
herein shall be affected by the Act entitled
"An Act to provide for oeean mail service
between the United States and foreign
ports, and to promote commerce," approv¬
ed March 3, 1891.
Sec. 25. That for the classification of
vessels owned by the United States, and
for sueh other purposes in connection there¬
with as are the proper functions of a classi¬
fication bureau, all departments, boards,
bureaus, and commissions of the Govern¬
ment are hereby directed to recognize the
American Bureau of Shipping as their
agency so long as the American Bureau
of Shipping continues to be maintained as
an organization which has no capital stock
and pays no dividends ; Provided, That the
Secretary of Commerce and the chairman
of the board shall each appoint one repre¬
sentative who shall represent the Go'/em¬
inent upon the executive committee of the
American Bureau of Shipping, and the bu¬
reau shall agree that these representatives
shall be accepted by them as active mem¬
bers of such committee. Such repre¬
sentatives of the Government shall serve
without any compensation, except neces¬
sary traveling expenses: Provided further.
That the official list of merchant vessels
published by the Government shall hereafter
contain a notation clearly indicating all ves¬
sels dlassed by the American Bureau of
Shipping.
Sec. 26. That cargo vessels documented
under the laws of the United States may
carry not to exceed sixteen persons in ad¬
dition to the crew .between any ports or
places in the United States or its Districts,
Territories, or possessions, or between any
such port or place and any foreign port,
or from any foreign port to another foreign
port, and such vessels shall not be held to be
"passenger vessels" or "vessels carrying
passengers" within the meaning of the in¬
spection laws and the rules and regulations
thereunder; Provided, That nothing herein
21
shall be taken to exempt such vessels from
the laws, rules, and regulations respecting
life-saving equipment: Provided further.
That when any such vessel carries persons
other than the crew as herein provided for,
the owner, agent, or master of the vessel
shall first notify such persons of the pres¬
ence on board of any dangerous articles, as
defined by law, or of any other condition
or circumstance which would constitute a
risk of safety for passenger or crew.
The privilege bestowed by this section
on vessels of the United States shall be
extended in so far as the foreign trade is
concerned to the cargo vessels of any
nation which allows the like privilege to
cargo vessels of the United States in trades
not restricted to vessels under its own flag.
Failure on the part of the owner, agent,
or master of the vessel to give such notice
shall subject the vessel to a penalty of $500,
which may be mitigated or remitted by the
Secretary of Commerce upon a proper rep¬
resentation of the facts.
Sec. 27. That no merchandise shall be
transported by water, or by land and water,
on penalty of forfeiture thereof, between
points in the United States, including Dis¬
tricts, Territories, and possessions thereof
embraced within the coastwise laws, either
directly or via a foreign port, or for any
part of the transportation, in any other ves¬
sel than a vessel built in and documented
under the laws of the United States and
owned by persons who are citizens of the
•United States, or vessels to which the privi¬
lege of engaging in the coastwise trade is
extended by sections 18 or 22 of this Act:
Provided, That this section shall not apply
to merchandise transported between points
within the continental United States, ex¬
cluding Alaska, over through routes here¬
tofore or hereafter recognized by the Inter-
.state Commerce Commission for which
routes rate tariffs have been or shall here¬
after be filed with said commission when
such routes are in part over Canadian rail
lines and their own or other connecting
water facilities: Provided further, That this
22
section shall not become effective upon the
Yukon River until the Alaska Railroad shall
be completed and the Shipping Board shall
find that proper facilities will be furnished
for transportation by persons citizens of the
United States for properly handling the
traffic.
Sec. 28. That no common carrier shall
charge, collect, or receive, for transporta¬
tion subject to the Interstate Commerce Act
of persons or property, under any joint
rate, fare, or charge, or under any export,
import, or other proportional rate, fare, or
charge, which is based in whole or in part
on the fact that the persons or property
affected thereby is to be transported to, or
has been transported from, any port in a
possession or dependency of the United
States, or in a foreign country, by a carrier
by water in foreign commerce, any lower
rate, fare, or charge than that charged, col¬
lected, or received by it for the transporta¬
tion of persons, or of a like kind of property,
for the same distance, in the same direction,
and over the same route, in connection with
commerce wholly within the United States,
unless the vessel so transporting such per¬
sons or property is, or unless it was at the
time of such transportation by water, docu¬
mented under the laws of the United States.
Whenever the board is of the opinion, how¬
ever, that adequate shipping facilities to or
from any port in a possession or dependency
of the United States or a foreign country
are not afforded by vessels so documented,
it shall certify this fact to the Interstate
Commerce Commission, and the commission
may, by order, suspend the operation of the
provisions of this section with respect to
the rates, fares, and charges for the trans¬
portation by rail of persons and property
transported from, or to be transported, to
such ports, for such length of time and un¬
der such terms and conditions as it may
prescribe in such order, or in any order
supplemental thereto. Such suspension of
operation of the provisions of this section
may be terminated by order of the commis¬
sion whenever the board is of the opinion
23
that adequate shipping facilities by such
vessels to such ports are afforded and shall
so certify to the commission.
Sec. 29. (a) That whenever used in this
section—
(1) The term "association" means any
association, exchange, pool, combination, or
other arrangement for concerted action ; and
(2) The term "Marine Insurance Compa¬
nies" means any persons, companies, or as¬
sociations authorized to write marine in¬
surance or reinsurance under the laws of
the United States or of a State, Territory,
District, or possession thereof.
(b) Nothing contained in the "anti-trust
laws" as designated in Section 1 of the Act
entitled "An Act to supplement existing
laws against unlawful restraints and mon¬
opolies, and for other purposes," approved
October 15, 1914, shall be construed as de¬
claring illegal an association entered into
by marine insurance companies for the fol¬
lowing purposes: To transact a marine
insurance and reinsurance business in the
United States and in foreign countries and
to reinsure or otherwise apportion among
its membership the risks undertaken by such
association or any of the component mem¬
bers.
Sec. 30. Subsec. A. That this section may¬
be cited as the "Ship Mortgage Act, 1920."
Definitions.
Subsec. B. When used in this section—
' (1) The term "document" includes regis¬
try and enrollment and license;
(2) The term "documented" means regis¬
tered or enrolled or licensed under the laws
of the United States whether permanently
or temporarily;
(3) The term "port of documentation"
means the port at which the vessel is docu¬
mented in accordance with law ;
(4) The term "vessel of the United
States" means any vessel documented under
the laws of the United States and such ves¬
sel shall be held to continue to be so docu¬
mented until its documents are surrendered
with the approval of the board ; and
24
(5) The term "mortgagee" in the case of
a mortgage involving a trust deed and a
bond issue thereunder means the trustee
designated in such deed.
Recording of Sales, Conveyances, and
Mortgages of Vessels of the United States.
Subsec. C. (a) No sale, conveyance, or
mortgage which, at the time such sale, con¬
veyance, or mortgage is made includes a
vessel of the United States or any portion
thereof, as the whole or any part of the prop¬
erty sold, conveyed, or mortgaged shall be
valid, in respect to such vessel, against any
person other than the grantor or mortgagor,
his heir or devisee, and a person having
actual notice thereof, until such bill of sale,
conveyance or mortgage is recorded in the
office of the collector of customs of the port
of documentation of such vessel as provided
in subdivision (b) of this subsection.
(b) Such collector of customs shall rec¬
ord bills of sale, conveyances, and mort¬
gages, delivered to him, in the order of
their reception, in books to be kept for that
purpose and indexed to show—
(1) The name of the vessel;
(2) The names of the parties to the sale,
conveyance, or mortgage ;
(3) The time and date of reception of
the instrument;
(4) The interest in the vessel so sold,
conveyed, or mortgaged ; and
(5) The amount and date of maturity of
the mortgage.
Subsec. D. (a) A valid mortgage which,
at the time it is made includes the whole of
any vessel of the United States of 200 gross
tons and upward, shall in addition have, in
respect to such vessel and as of the date of
the compliance with all the provisions of this
subdivision, the preferred status given by
the provisions of subsection M, if—
(1) The mortgage is indorsed upon the
vessel's documents in accordance with the
provisions c: this section;
(2) The mortgage is recorded as provid¬
ed in subsection C, together with the time
and date when the mortgage is so indorsed;
25
(3) An affidavit is filed with the record
of such mortgage to the effect that the
mortgage is made in good faith and without
any design to hinder, delay, or defraud any
existing or future creditor of the mortgagor
or any lienor of the mortgaged vessel ;
(4) The mortgage does not stipulate
that the mortgagee waives the preferred
status thereof ; and
(5) The mortgagee is a citizen of the
United States.
(b) Any mortgage which complies in
respect to any vessel with the conditions
enumerated in this subsection is hereafter
in this section called a "preferred mortgage"
as to such vessel.
(c) There shall be indorsed upon the
documents of a vessel covered by a prefer¬
red mortgage—
(1) The names of the mortgagor and
mortgagee ;
(2) The time and date the indorsement
is made;
(3) The amount and date of maturity
of the mortgage ; and
(4) Any amount required to be indorsed
by the provisions of subdivision (e) or (f)
of this subsection.
(d) Such indorsement shall be made (1)
by the collector of customs of the port of
documentation of the mortgaged vessel, or
(2) by the collector of customs of any port
in which the vessel is found, if such collec¬
tor is directed to make the indorsement l'y
the collector of customs of the port of dr.cu-
mentation ; and no clearance shall be is¬
sued to the vessel until such indorsement
is made. The collector of customs of the
port of documentation shall give such direc¬
tion by wire or letter at the request of the
mortgagee and upon the tender of the cost
of communciation of such direction. When¬
ever any new document is issued for the.
vessel, such indorsement shall be transfer¬
red to and indorsed upon the new document
by the collector of customs.
(e) A mortgage which includes property
other than a vessel shall not be held a
26
preferred mortgage unless the mortgage
provides for the separate discharge of such
property by the payment of a specified por¬
tion of the mortgage indebtedness. If a
preferred mortgage so provides for the sep¬
arate discharge, the amount of the portion
of such payment shall be indorsed upon the
documents of the vessel.
(f) If a preferred mortgage includes
more than one vessel and provides for the
separate discharge of each vessel by the pay¬
ment of a portion of the mortgage indebted¬
ness, the amount of such portion of such
payment shall be indorsed upon the docu¬
ments of the vessel. In case such mortgage
does not provide for the separate discharge
of a vessel and the vessel is to be sold upon
the order of a district court of the United
States in a suit in rem in admiralty, the
court shall determine the portion of the
mortgage indebtedness increased by 20 per
cent (1) which, in the opinion of the court,
the approximate value of the vessel bears
to the approximate value of all the vessels
covered by the mortgage, and (2) upon the
payment of which the vessel shall be dis¬
charged from the mortgage.
Subsec. E. The collector of customs
upon the recording of a preferred mortgage
shall deliver two certified copies thereof to
the mortgagor who shall place, and use due
diligence to retain, one copy on board the
mortgaged vessel and cause such copy and
the documents of the vessel to be exhibited
by the master to any person having business
with the vessel, which may give rise to a
maritime lien upon the vessel or to the sale,
conveyance, or mortgage thereof. The
master of the vessel shall, upon the request
of any such person, exhibit to him the docu¬
ments of the vessel and the copy of any pre¬
ferred mortgage of the vessel placed on
board thereof.
Subsec. F. The mortgagor (1) shall
upon request of the mortgagee, disclose in
writing to him prior to the execution of any
preferred mortgage, the existence of any
maritime lien, prior mortgage, or other ob¬
ligation or liability upon the vessel to be
27
mortgaged, that is known to the mortgagor,
and (2), without the consent of the mortga¬
gee, shall not incur, after the execution of
such mortgage and before the mortgagee
has had a reasonable time in which to record
the mortgage and have indorsements in re¬
spect thereto made upon the documents of
the vessel, any contractual obligation creat¬
ing a lien upon the vessel other than a lien
for wages of stevedores when employed di¬
rectly by the owner, operator, master, ship's
husband, or agent of the vessel, for wages
of the crew of the vessel, for general aver¬
age, or for salvage, including contract sal¬
vage, in respect to the vessel.
Subsec. G. (a) The collector of customs
of the port of documentation shall, upon the
request of any person, record notice of his
claim of a lien upon a vessel covered by a
preferred mortgage, together with the na¬
ture, date of creation, and amount of the lien,
and the name and address of the person.
Any person who has caused notice of his
claim of lien to be so recorded shall, upon a
discharge in whole or in part of the indebt¬
edness, forthwith file with the collector of
customs a certificate of such discharge. The
collector of customs shall thereupon record
the certificate.
(b) The mortgagor, upon a discharge in
whole or in part of the mortgage indebted¬
ness, shall forthwith file with the collector
of customs for the port of documentation of
the vessel, a certificate of such discharge.
Such collector of customs shall thereupon
record the certificate. In case of a vessel
covered by a preferred mortgage, the col¬
lector of customs at the port of documenta¬
tion shall (1) indorse upon the documents
of the vessel, or direct the collector of cus¬
toms at any port in which the vessel is
found to so indorse the fact of such dis¬
charge, and (2) shall deny clearance to the
vessel until such indorsement is made.
Subsec. H. (a) No bill of sale, convey¬
ance, or mortgage shall be recorded unless
it states the interest of the grantor or mort¬
gagor in the vessel, and the interest so sold,
conveyed, or mortgaged,
28
(b) No bill of sale, conveyance, mort¬
gage, notice of claim of lien, or certificate
of discharge thereof, shall be recorded un¬
less previously acknowledged before a no¬
tary public or other officer authorized by
a law of the United States, or of a State,
Territory, District, or possession thereof, to
take acknowledgement of deeds.
(c) In case of a change in the port of
documentation of a vessel of the United
States, no bill of sale, conveyance, or mort¬
gage shall be recorded at the new port of
documentation unless there is furnished to
the collector of customs of such port, to¬
gether with the copy of the bill of sale, con¬
veyance, or mortgage to be recorded, a cer¬
tified copy of the record of the vessel at
the former port of documentation furnished
by the collector of such port. The collec¬
tor of customs at the new port of documen¬
tation is authorized and directed to re¬
cord such certified copy.
(d) A preferred mortgage may bear such
rate of interest as is agreed by the parties
thereto.
Subsec. I. Each collector of customs
shall permit records made under the pro¬
visions of this section to be inspected dur¬
ing office hours, under such reasonable regu¬
lations as the collector may establish. Upon
the request of any person the collector of
customs shall furnish him from the records
of the collector's office (1) a certificate set¬
ting forth the names of the owners of any
vessel, the interest held by each owner, and
the material facts as to any bill of sale or
conveyance of, any mortgage covering, or
any lien or other incumbrance upon a speci¬
fied vessel, (2) a certified copy of any bill
of sale, conveyance, mortgage, notice of
claim of lien, or certificate of discharge in re¬
spect to such vessel, or (3) a certified copy
as required by subdivision (c) of subsec¬
tion H. The collector of customs shall col¬
lect a fee for any bill of sale, conveyance, or
mortgage recorded, or any certificate or cer¬
tified copy furnished, by him, in the amoum
of 20 cents a folio with a minimum charge
of $1. All such fees shall be covered into
29
the Treasury of the United States as mis¬
cellaneous receipts.
Penalties.
Subsec. J. (a) If the master of the ves¬
sel willfully fails to exhibit the documents
of the vessel or the copy of any preferred
mortgage thereof, as required by subsection
E, the board of local inspectors of vessels
having jurisdiction of the license of the
master, may suspend or cancel such license,
subject to the provisions of "An Act to pro¬
vide for appeals from decision of boards of
local inspectors of vessels, and for other
purposes," approved June 10, 1918.
(b) A mortgagor who, with intent to
defraud, violates any provision of subsection
F, and if the mortgagor is a corporation or
association, the president or other principal
executive officer of the corporation or asso¬
ciation, shall upon conviction thereof be
held guilty of a misdemeanor and shall be
fined not more than $1,000 or imprisoned
not more than two years, or both. The mort¬
gaged indebtedness shall thereupon become
immediately due and payable at the elec¬
tion of the mortgagee.
(c) If any person enters into any con¬
tract secured by, or upon the credit of, a ves¬
sel of the United States covered by a pre¬
ferred mortgage, and suffers pecuniary loss
by reason of the failure of the collector of
customs, or any officer, employee, or agent
thereof, properly to perform any duty re¬
quired of the collector under the provisions
of this section, the collector of cus¬
toms shall be liable to such person
for damages in the amount of such
loss. If any such person is caused
any such loss by reason of the fail¬
ure of the mortgagor, or master of the mort¬
gaged vessel, or any officer, employee, or
agent thereof, to comply with any provision
of subsection E or F or to file an affidavit
as required by subdivision (a) of subsec¬
tion D, correct in each particular thereof, the
mortgagor shall be liable to such person for
damages in the amount of such loss. The
district courts of the United States are given
30
jurisdiction (but not to the exclusion of the
courts of the several States, Territories, Dis¬
tricts, or possessions) of suits for the recov¬
ery of such damages, irrespective of the
amount involved in the suit or the citizen¬
ship of the parties thereto. Such suit shall
be begun by personal service upon the de¬
fendant within the limits of the district.
Upon judgment for the plaintiff in any such
suit, the court shall include in the judgment
an additional amount for costs of the action
and a reasonai^le counsel's fee, to be fixed
by the court.
Foreclosure of Preferred Mortgages.
Subsec. iv. A preferred mortgage shall
constitute a lien upon the mortgaged ves¬
sel in the amount of the outstanding mort¬
gage indebtedness secured by such vessel.
Upon the default of any term or condition
of the mortgage, such lien may be enforced
by the mortgagee by suit in rem in admir¬
alty. Original jurisdiction of all such suits
is granted to the district courts of the United
States exclusively. In addition to any notice
by publication, actual notice of the com¬
mencement of any such suit shall be given
by the libellant, in such manner as the court
shall direct, to (1) the master, other rank¬
ing officer, or caretaker of the vessel, and
(2) any person who has recorded a notice
of claim of an undischarged lien upon the
•vessel, as provided in subsection G, unless
after search by the libellant satisfactory to
the court, such mortgagor, master, other
ranking officer, caretaker, or claimant is not
found within the United States. Failure to
give notice to any such person, as recpiired
by this subsection, shall not constitute a
jurisdictional defect; but the libellant shall
be liable to such person for damages in the
amount of his interest in the vessel termin¬
ated by the suit. Suit in personam for the
recovery of such damages may be brought
in accordance with the provisions of subdiv¬
ision (c) of subsection J.
Subsec. L. In any suit in rem in admir¬
alty for the enforcement of the preferred
mortgage lien, the court may appoint a re-
31
ceiver and, in its discretion, authorize the
receiver to operate the mortgaged vessel.
The marshal may be authorized and direct¬
ed by the court to take possession of the
mortgaged vessel notwithstanding the fact
that the vessel is in the possession or under
the control of any person claiming a posses¬
sory common-law lien.
Subsec. AI. (a) When used heremafter
in this section, the term "preferred maritime
lien" means (1) a lien arising prior in time
to the recording and indorsement of a pre¬
ferred mortgage in accordance with the pro¬
visions of this section ; or (2) a lien for dam¬
ages arising out of tort, for wages of a
stevedore when employed directly by the
owner, operator, master, ship's husband, or
agent of the vessel, for wages of the crew
of the vessel, for general average, and for
salvage, including contract salvage.
(b) Upon the sale of any mortgaged ves¬
sel by order of a district court of the United
States in any suit in rem in admiralty for
the enforcement of a preferred mortgage
lien thereon, all preexisting claims in the
vessel, including any possessory common-
law lien of which a lienor is deprived under
the provisions of subsection L shall be held
terminated and shall thereafter attach, in
like amount and in accordance with their re¬
spective priorities, to the proceeds of the
sale ; except that the preferred mortgage lien
shall have priority over all claims against
the vessel, except (1) preferred maritime
liens, and (2) expenses and fees allowed
and costs taxed, by the court.
Subsec. N. (a) Upon the default of any
term or condition of a preferred mortgage
upon a vessel, the mortgagee may, in ad¬
dition to all other remedies granted by this
section, bring suit in personam in admirality
in a district court of the United States,
against the mortgagor for the amount of the
outstanding mortgage indebtedness secured
by such vessel or any deficiency in the full
payment thereof.
(b) This section shall not I)e construed,
in the case of a mortgage covering, in ad-
32
dition to vessels, really or personalty other
than vessels, or both, to authorize the en¬
forcement by suit in rem in admiralty of the
rights of the mortgagee in respect to such
realty or personalty other than vessels.
Transfers of Mortgaged Vessels and As¬
signment of Vessel Mortgages.
Subsec. O. (a) The documents of a ves¬
sel of the United States covered by a pre¬
ferred mortgage may not be surrendered
(except in the case of the forfeiture of the
vessel or its sale by the order of any court of
the United States or any foreign country)
without the approval of the board. The
board shall refuse such approval unless the
mortgagee consents to such surrender.
(b) The interest of the mortgagee in a
vessel of the United States covered by a
mortgage, shall not be terminated by the
forfeiture of the vessel for a violation uf any
law of the United States, unless the i. ort-
gage authorized, consented, or conspired to
effect the illegal act, failure, or omission
which constituted such violation.
(c) Upon the sale of any vessel of the
United States covered by a preferred mort¬
gage, by order of a district court of the
United States in any suit in rem in admiralty
for the enforcement of a maritime lien other
than a preferred maritime lien, the vessel
shall be sold free from all preexisting claims
thereon ; but the court shall, upon the re¬
quest of the mortgagee, the libellant, or any
intervenor, require the purchaser at such
sale to give and the mortgagor to accept
a new mortgage of the vessel for the balance
of the term of the original mortgage. The
conditions of such new mortgage shall be
the same, so far as practicable, as those of
the original mortgage and shall be subject
to the approval of the court. If such new
mortgage is given, the mortgagee shall not
be paid from the proceeds of the sale and
the amount payable as the purchase price
shall be held diminished in the amount of
the new mortgage indebtedness.
(d) No rights under a mortgage of a
vessel of the United States shall be assign-
33
ed to any person not a citizen of the United
States without the approval of the board.
Any assignment in violation of any provi¬
sion of this section shall be void.
(e) No vessel of the United States shall
be sold by order of a district court of the
United States in any suit in rem in admiral¬
ty to any person not a citizen of the United
States.
Maritime Liens for Necessaries.
Subsec. P. Any person furnishing re¬
pairs, supplies, towage, use of dry dock or
marine railway, or other necessaries, to any
vessel, whether foreign or domesric, upon
the order of the owner of such vessel, or of
a person authorized by the owner, shall have
a maritime lien on the vessel, which may be
enforced by suit in rem, and it shall not be
necessary to allege or prove that credit was
given to the vessel.
Subsec. Q. The following persons shall
be presumed to have authority from the
owner to procure repairs, supplies, towage,
use of dry dock or marine railway, and other
necessaries for the vessel : The managing
owner, ship's husband, master, or any per¬
son to whom the management of the ves-
.sel at the port of supply is intrusted. No per¬
son tortiously or unlawfully in possession
or charge of a vessel shall have authority
to bind the vessel.
Subsec. R. The officers and agents of a
vessel specified in subsection Q sh.all be
taken to include such officers and agents
when appointed b}' a charterer, by an own¬
er pro hac vice, or by an agreed purchaser
in possession of the vessel; but nothing in
this section shall be construed to confer a
lien when the furnisher knew, or by exer¬
cise of reasonable diligence could have ascer¬
tained, that because of the terms of a char¬
ter party, agreement for sale of the vessel,
or for any other reason, the person order¬
ing the repairs, sup])lies, or other necessar¬
ies was without authority to bind the ves¬
sel therefor.
Subsec. S. Nothing in this section shall
be construed to prevent the furnisher of re-
34
pairs, supplies, towage, use of dry dock or
marine railway, or other necessaries, or the
mortgagee, from waiving his right to a lien,
or in the case of a preferred mortgage lien,
to the preferred status of such lien, at any
time, by agreement or otherwise ; and
this section shall not be construed to af¬
fect the rules of law now existing in re¬
gard to (1) the right to proceed against the
vessel for advances, (2) laches in the en¬
forcement of liens upon vessels, (3) the
right to proceed in personam, (4) the rank
of preferred maritime liens among them¬
selves, or (5) priorities between maritime
liens and mortgages, other than preferred
mortgages, upon vessels of the United
States.
Subsec. T. This section shall supersede
the provisions of all State statutes confer¬
ring liens on vessels, in so far as such stat¬
utes purport to create rights of action to
be enforced by suits in rem in admiralty
against vessels for repairs, supplies, towage,
use of dry dock or marine railway, and oth¬
er necessaries.
Miscellaneous Provisions.
Subsec. U. This section shall not apply
(1) to any existing mortgage, or (2) to any
mortgage hereafter placed on any vessel
now under an existing mortgage, so long
as such existing mortgage remains undis¬
charged.
Subsec. V. The Secretary of Commerce
is authorized and directed to furnish collec¬
tors of customs with all necessary books
and records, and with certificates of regis¬
try and of enrollment and license in such
form as provides for the making of all in¬
dorsements thereon required by this sec¬
tion.
Subsec. W. The Secretary of Commerce
is authorized to make such regulations in
respect to the recording and indorsing of
mortgages covering vessels of the United
States as he deems necessary to the effi¬
cient execution of the provisions of this
section.
Subsec. X. Sections 4192 to 4196, inclu-
35
sive, of the Revised Statutes of the United
States, as amended, and the act entitled "An
Act relating to liens on vessels for rcf'ahs,
supplies, or other necessaries," approved
June 23, 1910, are repealed. This section,
however, so far as not inconsistent with
any of the provisions of law so repealed,
shall be held a reenactment of such repealed
law, and any right or obligation based upon
any provision of such law and accruing prior
to such repeal, may be prosecuted in the
same manner and to the same efïect as if
this act had not been passed.
Sec. 31. That section 4530 of the Revised
Statutes of the United States is amended to
read as follows ;
"Sec, 4530, Every seaman on a vessel
of the United States shall be entitled to re¬
ceive on demand from the master of the
vessel to which he belongs one-half part of
the balance of his wages earned and remain¬
ing unpaid at the time when such demand is
made at every port where such vessel, after
the voyage has been commenced, shall load
or deliver cargo before the voyage is ended,
and all stipulations in the contract to the
contrary shall be void : Provided, Such a
demand shall not be made before the ex¬
piration of, nor offener than once in, five
days nor more than once in the same harbor
on the same entry. Any failure on the part
of the master to comply with this demand
shall release the seaman from his contract
and he shall be entitled to full payment of
wages earned. And when the voyage is
ended every such seaman shall be entitled
to the remainder of the wages which shall
be then due him, as provided in section 4529
of the Revised Statutes : Provided further,
That notwithstanding any release signed
by any seaman under section 4552 of the
Revised Statutes any court having jurisdic¬
tion may upon good cause shown set aside
such release and take such action as justice
shall require: And provided further. That
this section shall apply to seamen on for¬
eign vessels while in harbors of the United
States, and the courts of the United States
36
shall be open to such seamen for its en¬
forcement."
Sec. 32. That paragraph (a) of section 10
of the Act entitled "An Act to remove cer¬
tain burdens on the American merchant ma¬
rine and encourage the American foreign
carrying trade, and for other purposes," ap¬
proved June 26, 1884, as amended, is here-
hy amended to read as follows:
"Sec. 10. (a) That it shall be, and is here¬
by, made unlawful in any case to pay any
seaman wages in advance of the time when
he has actually earned the same, or to pay
such advance wages, or to make any order,
or note, or other evidence of indebtedness
therefor to any other person, or to pay any
person, for the shipment of seamen when
payment is deducted or to be deducted
from a seaman's wages. Any person vio¬
lating any of the foregoing provisions of
this section shall be deemed guilty of a mis¬
demeanor, and upon conviction shall be
punished by a fine of not less than $25 nor
more than $100, and may also be imprisoned
for a period of not exceeding six months, at
the discretion of the court. The payment
of such advance wages or allotment,
whether made within or without the United
States or territory subject to the jurisdic¬
tion thereof, shall in no case except as here¬
in provided absolve the vessel or the master
or the owner thereof from the full payment
of wages after the same shall have been
actually earned, and shall be no defense to
a libel suit or action for the recovery of
such wages. If any person shall demand or
receive, either directly or indirectly, from
any seaman or other person seeking em¬
ployment, as seaman, or from any person
on his behalf, any remuneration v/ha (ever
for providing bim with employment, he shall
for every such offense be deemed guilty of
a misdemeanor and shall be imprisoned not
more than six months or fined not more
than $500."
Sec. 33. That section 20 of such Act of
March 4, 1915, be, and is, amended to read
as follows :
37
"Sec. 20. That any seaman who shall suf¬
fer personal injury in the course of his em¬
ployment may, at his election, maintain an
action for damages at law, with the right of
trial by jury, and in such action all statutes
of the United States modifying or extending
the common-law right or remedy in cases
of personal injury to railway employees
shall apply ; and in case of the death of any
seaman as a result of any such personal in¬
jury the personal representative of such sea¬
man may maintain an action for damages at
law with the right of trial by jury, and in
such action all statutes of the United States
conferring or regulating the right of action
for death in the case of railway employees
shall be applicable. Jurisdiction in such ac¬
tions shall be under the court of the district
in which the defendant employer resides or
in which his principal office is located."
Sec. 34. That in the judgment of Con¬
gress, articles or provisions in treaties or
conventions to which the United States is
a partv', which restrict the right of the
United States to impose discriminating cus¬
toms duties on imports entering the United
States in foreign vessels and in vessels of
the United States, and which also restrict
the right of the United States to impose
discriminatory tonnage dues on foreign ves¬
sels and on vessels of the United States
entering the United States should be term¬
inated, "and the President is hereby author¬
ized and directed within ninety days after
this Act becomes law to give notice to the
several Governments, respectively, parties
to such treaties or conventions, that so
much thereof as imposes any such restric¬
tion on the United States will terminate
on the cxpirtion of such periods as may be
rcc|uired for the giving of such notice by
the provisions of such treaties or conven-
titms.
.Sec. 35. That tlie power and authority
vested in the l)oard by this Act, except as
hi.Tcin otherwise specifically provided, may
lie cxerei.'^^ed directly by tlie board, or by
it through the United States Shipping
Board Emergency Fleet Corporation.
38
Sec. 36. That if any provision of this Act
is declared unconstitutional or the applica¬
tion of any provision to certain circum¬
stances be held invalid, the remainder of
the Act and the application of such pro¬
visions to circumstances other than those
as to which it is held invalid shall not be
affected thereby.
Sec. 37. That when used in this Act, un¬
less the context otherwise requires, the
terms "person," "vessel," "documented un¬
der the laws of the United States," and
"citizen of the United States" shall have
the meaning assigned to them by sections
1 and 2 of the "Shipping Act, 1916," as
amended by this Act ; the term "board"
means United States Shipping Board ; and
the term "alien" means any person not a
citizen of the United States.
Sec. 38. That section 2 of the "Shipping
.'\ct, 1916," is amended to read as follows :
"Sec. 2 (a) That within the meaning of
this Act no corporation, partnership, or as¬
sociation shall be deemed a citizen of the
United States unless the controlling inter¬
est therein is owned by citizens of the
United States, and, in the case of a corpora¬
tion, unless its president and managing di¬
rectors are citizens of the United States and
the corporation itself is organized under
the laws of the United States or of a State,
Territory, District, or possession thereof;
but in the case of a corporation, associa¬
tion, or partnership operating any vessel in
the coastwise trade the amoimt of interest
required to be owned by citizens of the
United States shall be 75 per centum.
"(b) The controlling interest in a corpor¬
ation shall not be deemed to be owned by
citizens of the United States (a) if the title
to a majority of the stock thereof is not
vested in such citizens free from any trust
or fiduciary obligation in favor of any per¬
son not a citizen of the United States; or
(b) if the majority of the voting power in
such corporation is not vested in citizens of
the United States ; or (c) if through any
contract or understanding it is so arranged
39
that the majority of the voting power may
be exercised, directly or indirectly, in be¬
half of any person who is not a citizen of
the United States; or (d) if by any other
means whatsoever control of the corpora¬
tion is conferred upon or permitted to be
exercised by any person who is not a citi¬
zen of the United States.
"(c) Seventy-five per centum of the inter¬
est in a corporation shall not be deemed to
be owned by citizens of the United States
(a) if the title to 75 per centum of its stock
is not vested in such citizens free from any
trust or fiduciary obligation in favor of any
person not a citizen of the United States; or
(b) if 75 per centum of the voting power in
such corporation is not vested in citizens
of the United States; or (c) if, through any
contract or understanding it is so arranged
that more than 25 per centum of the voting
power in such corporation may be exercised
directly or indirectly, in behalf of any per¬
son who is not a citizen of the United
States ; or (d) if by any other means what¬
soever control of any interest in the corpor¬
ation in excess of 25 per centum is conferred
upon or permitted to be exercised by any
person who is not a citizen of the United
States.
"(d) The provisions of this Act shall ap¬
ply to receivers and trustees of all persons
to whom the Act applies, and to the suc¬
cessors or assignees of such persons."
Sec. 39. That this Act may be cited as the
Merchant Marine Act, 1920.
Approved; June 5, 1920.
40
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FOREIGN TRADE
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Foreign Exchange
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Travelers Letters of Credit
or information respecting any phase
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(FOREIGN DEPARTMENT)
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NATIONAL BANK
( ESTABLISHED 1838 )
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